Paul Krugman: Blaming welfare spending for the financial crisis is akin to saying that soup kitchens caused the Great Depression

Some readers have been asking me to reply to Casey Mulligan’s latest attack on my recent book. Um, no. Life is short, and if I spent my time responding to every attack on yours truly — or indeed, every thing Mulligan himself writes that I consider foolish — I would have no time to do anything else. So let me just outsource this to John Quiggin.

Now, Quiggin’s post takes on both Mulligan’s specifics and the broader claim that increased use of the social safety net is a cause rather than a result of the depressed economy.

As one of his commenters points out, this amounts to the claim that soup kitchens caused the Great Depression. Quiggin does an admirable job of refuting this claim.

I would, however, add one more point.

If you really believe that the problem is that excessive generosity to the downtrodden is reducing the incentive to work, so that what we really have is a supply problem rather than a demand problem, you should expect to see upward pressure on wages.

What we actually see:

Oh, and feel the hyperinflation.

The New York Times